Understanding the Oil Depletion Controversy

This recent article by Peter Orszag discusses how the new trend of domestic fracking could further decrease the United States’ dependence on foreign oil, and dispel the peak-oil hypothesis. Since the topic is highly controversial, it’s important to know a bit about these terms.

What is peak theory?

Peak theory states that, for any finite natural resource, there will be a maximum point of production (whether in a specific area or the globe as a whole) after which production will gradually decline until the resource has been exhausted. As for peak oil, American geophysicist M. King Hubbert predicted that the United States would reach its peak production point somewhere between 1965 and 1970. Hubbert’s prediction was correct (thus far); the US reached peak oil production in 1970.

Peak theory also concludes that a resource will be exhausted when it is no longer as easily accessible, and it becomes more difficult and more expensive to extract. When it becomes so expensive to extract that it surpasses the actual value of the resource, this creates a major problem.

What is fracking?

Fracking, also known as hydraulic fracturing, utilizes the technique of pumping extremely pressurized water, sand, and chemicals deep beneath the ground to break up impenetrable rock to expel natural gas, and now, oil.

Could the fracking boom actually dispel Hubbert’s theory?

Peter Orszag only entertained this idea in his article, and didn’t state this to be a fact. Whether or not the fracking trend could actually prove Hubbert wrong has yet to be seen. Fracking for oil is highly controversial, and while there is a possible growth in the practice, it faces a lot of criticism.

Why is it controversial?

There are a few reasons fracking is controversial—environmental and public safety concerns are among the biggest. Fracking for natural gas has contaminated water and air in certain areas previously. Concerns include air pollution, ground water contamination, and radioactive contamination. These concerns stem from the chemicals that are used in the process, the potential for waste mishandling, operations mishaps, and the extremely large amount of water that must be used in the process. The environmental risk also poses a health and safety risk with the potential for illness and cancer.

Concluding thoughts

One of the most important aspects of the Peter Orszag article is the dissemination of objective information. It’s important that we know about what is happening in not only our country, but our world, regarding environmental safety and economic growth, and the methods by which we enhance or disrupt either one of them.

What do you think of Hubbert’s theory? What do you think of fracking? What ideas do you have for promoting clean energy and tapping out of finite resources? Feel free to share your thoughts.